They may not be turning cartwheels yet at Wal-Mart Stores, but the company released third-quarter results showing the first comparable-store sales gain in the U.S. in 10 quarters.
Overall net sales hit $109.5 billion, an increase of 8.2% percent from $101.2 billion in net sales in last year's third quarter. And at Walmart’s U.S. stores, comparable results rose 1.3%, while sales at Sam’s Club (excluding gasoline) gained 5.7%, both above the company’s forecast. At Walmart International, sales gained 20% to $32.4 billion for the quarter. But profits declined 2.9%, pressured by higher costs, disappointing investors.
Key to reversing that negative, 30-month trend in the U.S.? “Our focus on expanded assortment, product innovation and local relevance improved merchandise offerings throughout the store and customers responded,” Bill Simon, Walmart U.S. president/CEO says in the company’s release. “Productivity initiatives improved in-stock levels, and we continue to drive price leadership in all our stores."
“The Walmart U.S. team has aggressively executed its plan to broaden assortment, improve merchandising and reaffirm Walmart’s price leadership,” Walmart CEO Mike Duke added later in a conference call on the results. “The plan is working, customers are responding favorably, and it’s good to see that reflected in our comp sales improvement.”
Grocery and health and wellness performed well, while home goods declined.
Still, the Bentonville, Ark.-based retailer says the economy continues to weigh on Walmart’s core shoppers. “Our customers remain concerned about jobs, and only one in 10 Walmart Moms that we surveyed view the state of the U.S. economy as good,” he adds. “They want to save money. They’re juggling credit cards, using coupons, and skipping restaurants and vacations. There is a real sense that the economic strain is taking its toll.”
Simon says the company will intensify its focus on price in the weeks ahead. "We will continue to execute our price investment strategy. The holiday season is under way and we're aggressively going after the business this season. We have been open on Thanksgiving for several years, and this year, we kick off event sales at 10 p.m. that day. And, our ad match and Christmas price guarantee will leave no doubt that Walmart is the clear price leader this holiday season." He says the recently added lay-away plan has been well received.
In the conference call, he adds that the company has stepped up its marketing across multiple media platforms. “Customers will see and hear Walmart everywhere this holiday season. We’ve bought a strong share of voice nationally and in individual key markets.”
For the fourth quarter, the company is forecasting comparable-store sales gains of flat to positive 2% in the U.S.